Gold Drop: An Opportunity?

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This question, or variations of it, is the most common inquiry made of coin dealers today.

As of the COMEX closes Monday, the price of gold is down over 28 percent and silver almost 44 percent from October 4, 2012. Results like these have many “strong hands” owners of precious metals wondering where they went wrong in their thinking. More than a few have bailed out.

So, will gold and silver prices ever go back up and when will that happen? The obvious answer is that I don’t know. Actually, no one knows the answer. However, there are a number of things from financial markets that indicate that the prices of gold and silver are continuously suppressed for the benefit of the U.S. government rather than prices fell as the result of free market trading. Further, the tactics now used to manipulate prices indicate a greater degree of desperation than did the measures of years past.

For example, when prices fell in mid April and again since last Thursday, the declines were attributable to massive quantities of gold and silver being sold in a short key time, a pattern that does not normally occur in a free market. Parties seeking to liquidate a large gold or silver position at the highest possible price will try to do so while attracting the least attention. Almost always, such sales are allocated among multiple brokers, none who know that they are only handling a small part of the total quantity being sold. Such sales also tend to be sold over the course of multiple days and even weeks and months so as to avoid attracting attention to any broker’s activity.